Everything You Should Know About ZCash

According to a comprehensive 2021 Clario analysis, social media platforms like Instagram and Facebook, capture 69-80% of their users’ personal data. So, in that context, if the controversial Meta-backed Diem digital currency finds success in reaching the general public, the Mark Zuckerberg-owned company will inevitably gain access to its users’ transaction data as well. Put differently, if Diem sees the light of the day, Meta will not only know who you are, what you do for a living, and what you enjoy, but they will also know what you buy, when you buy, and how much you spend. 

Luckily, ZCash is one of the leading digital currency blockchains that aspires to address this developing problem and give its users back control and privacy. Here’s everything you need to know about ZCash and how it works.

What Is ZCash? 

In a nutshell, ZCash is a P2P (peer-to-peer) cryptocurrency, just like Bitcoin. Nevertheless, unlike BTC, ZCash’s exclusive priority is to focus on anonymous, private, and fungible transactions that BTC simply can’t do.

As a matter of fact, ZCash was initially forked out of BTC and launched in October 2016. The coin that was originally known as Zerocoin is based on a unique cryptographic protocol that safeguards the sender’s and receiver’s information and the amount exchanged between them.

ZCash’s open cryptocurrency project utilizes a zk-SNARK protocol, a new cryptographic zero-knowledge proof protocol that ensures anonymity, privacy, and fungibility of the tokens in circulation. All in all, ZCash, by design, has optional privacy and anonymity features for users who want to use them and remain safe.

How Does ZCash Work? 

When explaining how ZCash works, first, you should know that ZCash is unique in various ways. First and foremost, it’s one of the very few public ledgers that provide absolute anonymity to users. So, the network permits users to pick private transactions when they wish to achieve maximum protection. Notably, only private transactions remain non-visible, as anyone reviewing the network can see all public transactions.

The zk-SNARK Protocol 

As we already mentioned, right at the heart of ZCash is the zk-SNARK protocol. In fact, zk-SNARKS refers to the zero-knowledge succinct non-interactive argument of knowledge. zk-SNARK is the technology that enables ZCash’s privacy option, and the protocol’s design makes it easy for nodes to verify transactions promptly.

In addition, the protocol’s transactions are also called shielded transactions. These transactions are concluded in much the same way as regular ones, with the main difference being that they occur without explicitly divulging their contents. For that reason, ZCash users can discern whenever a shielded transaction appears on the blockchain as these transactions start with z and go by the name “z-addrs.”

What About ZCash Mining? 

Exactly like BTC, ZCash utilizes proof-of-work mining to secure the network. Nevertheless, while BTC utilizes an SHA-256 algorithm, ZCash utilizes something somewhat different, the Equihash algorithm. In addition, unlike BTC mining, where ASIC miners that are particularly expensive, specialized and powerful dominate the scene, ZCash’s algorithm attempts to somewhat discourage mining with these expensive miners. 

ZCash does this by making the mining capacity a product of RAM computer memory rather than computing power. And because of the expense of increasing RAM capacity within computers, the ZCash team believes that it’s improbable that anyone will be able to build cost-effective custom hardware (like ASIC miners) for mining ZCash in the foreseeable future. Moreover, even if manufacturers find a way to assemble an ASIC to mine on the ZCash network, the ZCash community has declared that they would immediately transition to another hashing algorithm.

How To Store ZCash? 

Nowadays, there are many different ways in which you can store ZCash. But, of course, perhaps the most popular method to keep your ZCash coins is using the official ZCash wallet. This wallet is readily available in both desktop and mobile app forms.

Another popular option to store your ZCash currency is using a hardware wallet. As a matter of fact, keeping your crypto on hardware wallets is considered the most secure option for storage. This is because these hardware wallets store your coins offline in what’s called “cold storage.” In addition, most of these wallets have physical buttons that you need to press in order to confirm a final transaction. These features make it practically impossible for hackers to access your funds.

Final Thoughts

In the end, the biggest takeaway is that ZCash is the direct result of the desire for anonymous, private transactions on the blockchain. As such, ZCash serves a distinct niche in the market at this time and is set to remain a strong contender in the crypto market for the years to come.